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Documentary Credit
International trade procedure in which the credit worthiness of an importer/exporter is substituted by the guaranty of a bank for a specific transaction. Under documentary credit arrangement (also called letter of credit ) a bank (usually in the importer's country) undertakes to pay for a shipment, provided the exporter submits the required documents (such as a clean bill of lading, certificate of insurance, certificate of origin) within a specified period.
- The payment can be at sight, deferred, by acceptance, or by negotiation
- The minimum duration is usually 3 months
Advantages:
- A fast, secure and efficient means of payment that is recognized and under international regulations
- Payment guaranteed at term
Bank Guarantees
It is a simple commitment that alleviates your cash flow.
It is a type of credit where BCI pledges to take its client’s place if the latter fails to meet terms, therefore guaranteeing the obligation to pay. It allows the client to accelerate cash collection or to alleviate their cash flow.
Advantages:
It offers clients the possibility to delay a disbursement or to accelerate a cash inflow.
Documentary Collection
A documentary collection is a trade transaction in which the exporter hands over the task of collecting payment for goods supplied to his or her bank, which sends the shipping documents to the importer’s bank together with payment instructions. A documentary collection (D/C) is so-called because the exporter receives payment from the importer in exchange for the shipping documents, with the funds and documents channeled through their respective banks. While D/Cs are less complicated and cheaper than letters of credit, they are riskier for exporters because they do not have a verification process and offer limited recourse if the importer does not pay. They are therefore only recommended in situations where the exporter and importer have a long-standing trade relationship.
Money Transfers through SWIFT
It is an international payment method, which consists of sending or receiving funds between two accounts from two different banks and two different countries. It is simple, fast and secured by a SWIFT code and an IBAN code under international regulation.
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